It is proposed to place cable on an existing pole line along the shore of a lake to

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter17: Long-term Investment Analysis
Section: Chapter Questions
Problem 10E
icon
Related questions
Question

Show complete manual solution 

It is proposed to place a
cable on an existing pole line
along the shore of a lake to
connect two points on
opposite sides.
Which is more economical?
Use the following methods
to support your answer.
a) Equivalent Uniform
Annual Cost Method (show
cash flow diagram)
b) Rate of return on
additional investment
Transcribed Image Text:It is proposed to place a cable on an existing pole line along the shore of a lake to connect two points on opposite sides. Which is more economical? Use the following methods to support your answer. a) Equivalent Uniform Annual Cost Method (show cash flow diagram) b) Rate of return on additional investment
Length, miles
First cost of cable per mile
Annual Maintenance per mile
Interest on investment
Taxes
Net Salvage Value per mile
Life, years
Land Route
10
P 40,000
P 950
15%
3%
P 12,000
10
Submarine Route
5
P 68,000
P 3,500
15%
3%
P 22,000
15
Transcribed Image Text:Length, miles First cost of cable per mile Annual Maintenance per mile Interest on investment Taxes Net Salvage Value per mile Life, years Land Route 10 P 40,000 P 950 15% 3% P 12,000 10 Submarine Route 5 P 68,000 P 3,500 15% 3% P 22,000 15
Expert Solution
steps

Step by step

Solved in 5 steps

Blurred answer
Knowledge Booster
Costs
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Managerial Economics: Applications, Strategies an…
Managerial Economics: Applications, Strategies an…
Economics
ISBN:
9781305506381
Author:
James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:
Cengage Learning